The arrival of the New Year invariably brings with it predictions of what the coming 12 months will have in store. The property sector is certainly no exception – developers, construction firms, sales agents and investors alike are keen to understand how the real estate market is likely to change over 2019.
To help filter through the noise, Experience Invest has picked out some of the key topics that are likely to dominate the property industry this year. Ranging from regional hotspots and student accommodation through to Brexit and foreign investment, here are the important trends to watch in 2019.
Property markets to thrive outside London
The average UK house price rose by 1.3% in 2018. However, these nationwide figures do not tell the full story.
While London saw house prices plateau – and even dip slightly in some boroughs – other regions outside the capital thrived. For example, property prices across Wales, the North West and the North East all grew by approximately 4% last year.
The narrowing of the property price gap between London and the rest of the country is likely to continue over the coming 12 months and beyond. Savills, for example, predicts that while London will see growth of 4.5% between now and 2023 (including a 2% dip in 2019), the North West is expected to experience a 21.6% rise over this same period.
For BTL landlords and property investors, evidently they must consider regions outside of London which offer higher levels of capital growth as well as healthy rental yields. To that end, Experience Invest currently has property investments in Luton, Liverpool and Newcastle, with many more to become available throughout 2019.
Student accommodation to remain in high demand
Moving from different regions to explore specific segments of the property market, student accommodation looks set to have another strong year in 2019. In fact, Knight Frank has estimated that the purpose built student accommodation (PBSA) sector is on track to reach a total combined value of more than £53 billion by the end of this year – a rise of almost £3 billion on its current value.
Driven by high interest among Asian and American investors, as well as stable demand from the UK’s large student population, the on-going growth of the PBSA market will be a trend to watch over the coming 12 months.
Amid the thriving student property markets across the UK, ever-popular university cities like Newcastle and Liverpool stand out – both of which are currently offering investment opportunities such as Opto Student Newcastle and Aura.
For more insight into this key trend, download Experience Invest’s 2019 UK Student Property Investment Guide.
The B-word will continue to dominate
Perhaps the safest prediction to make for 2019 is that Brexit will continue to dominate politics and current affairs.
With the UK’s departure from the European Union (EU) scheduled for 29 March, the first three months of the year will undoubtedly be filled with discussion about the terms of Brexit. Thereafter, once the formal separation takes place, the subject will still consume the spotlight – for better or worse, all elements of the property market will be trying to understand what the impact will actually be of the country’s departure from the EU.
For international investors, the uncertainty caused by Brexit – and more specifically the detrimental effect this has had on the value of the pound – has ensured interest in UK property has remained high.
The pound has dropped roughly 15% against the value of the dollar and euro since June 2016’s EU referendum. Coupled with the long-term appeal of the country’s bricks and mortar as an asset class, this has meant that Brexit has done little to dampen demand among foreign buyers.
There is nothing to suggest, therefore, that Brexit will see a decline in foreign investment in UK property. Nevertheless, all eyes will remain on the deadline at the end of March; and the greater clarity that comes at this point is likely to be welcomed by the property sector as a whole.
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